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y amy m. armstrong LEARNING FROM MISTAKES EARLY CAREER LESSONS GUIDE WEALTH MANAGER Eric Nelson, Co-founder and CEO www.servowealth.com A recent “Yahoo! Finance” article detailing how to select a financial advisor, focused several sections on the importance of finding an advisor who does the homework necessary to ensure that client assets are properly invested into asset classes that match their risk tolerance and growth requirements for future income. It’s a lesson Eric Nelson, a Chartered Financial Analyst (CFA) and co-founder and CEO of Servō Wealth Management, LLC, based in Oklahoma City, Oklahoma, learned long before he and his wife, Paige established their own wealth management firm in 2012. Nelson shares a humbling experience from the early years of his career, because it demonstrates just how much his approach to managing client assets has changed. After leaving college 15 years ago – with a degree in economics from Hobart College in Geneva, New York on the edge of the Finger Lakes region in hand – Nelson had little knowledge or experience in investing. “I did not understand the inner workings of the stock market or asset allocation techniques that well,” Nelson said of his early career working at a full commission brokerage firm, and later in the investment group of a large regional bank where he and Paige met. “I really wasn’t even that well versed with mutual funds.” Nelson was employed at Paine Webber in a sales-based investment culture, when his parents approached him in early 2000 with a small Roth account and a bank CD that had matured. They wanted him to make an investment decision for them. Admitting that he took the easy way out back then, he simply went down the hall to query older, more experienced brokers as to what he should recommend. Two out of three of those whose opinions he solicited named the same fund, and after being told of its stellar performance during the previous year, Nelson figured he had a winner. He was wrong. As he watched that investment decline nearly 75 percent during the next three years, Nelson’s relationship with Mom and Dad also became a bit rocky. “Instead of spending the time and doing the research necessary to figure out what would be a good investment for an account like this, I just walked down the hall,” he laments. “I should have asked, ‘How should I invest money for an older couple in their early 60s who are a bit more conservative?’ I didn’t go through that thought process. I did not spend the time educating myself on what the best recommendation would have been in that specific situation.” It took time, but Nelson’s relationship with THE SUIT MAGAZINE - JULY 2014
APPROACH DISCOVERY We spend whatever time necessary learning what is unique about your financial situation, experience, goals and resources. A brief introduction to our Asset Class approach to managing portfolios is also covered. PLANNING his parents repaired itself and he actively sought a much different approach to advising clients. Knowing that he had burned his own flesh and blood, Nelson decided that if he was going to remain in the business of providing financial advice, he couldn’t make a repeat performance. He had to learn methodologies based on well-regarded investment theory and evidence, not those that were sales driven. “That was the catalyst for me,” Nelson recalls. “I learned from the experience that I cannot just depend on what some brokerage firm is telling me to do. To this day, when I am presented with a situation where a new prospect has a scenario that I may not be familiar with, I am not going to just throw out some off-the-cuff solution. I am going to spend a good bit of time reading up on what the evidence says is the best thing to do in that situation.” By 2002, the former star Hobart basketball player and his wife, Paige, moved to her Oklahoma City hometown, going to work for Charles Schwab – the same firm that today provides custodial services for MANAGEMENT Servo clients. While at Schwab, Nelson attained the prestigious Chartered Financial Analyst designation. Five years after first joining Schwab, he moved over to a registered investment advisory also in Oklahoma City. Within a year, friends had convinced him to move to San Francisco, California, where Nelson spent three years with Equius Partners. With each move, Nelson was gaining valuable experience, additional investment expertise and a bigger, loyal band of clients who followed him, while keeping Schwab as their custodian. “The advice did not change and the custodian did not change, just Eric’s employer changed, is how client’s viewed the moves,” Nelson said. When it became increasingly clear that perhaps the couple could begin their own firm, Nelson finally had the experience and confidence to take the plunge in 2012 with 10 clients and $20 million in assets under management. “It’s the bare minimum necessary to pay the bills and keep a firm running,” he admits, also noting that, “it was pretty skinny there just a couple of years ago.” Now, in 2014, the firm has 25 clients from across the continental United States, with more than $52 million in assets under management. Nelson keeps building the firm through referrals from existing clients and by continually blogging, creating an awareness of the Servo brand, with an emphasis on educating prospects and current clients regarding the importance of evidence and goals-based, long-term investing. While the firm has more than doubled in its first two years, it still has room to grow, with a goal of 125 to 150 long-term clients. “I look at our job as swimming upstream against the financial media who are constantly inundating investors with short-term oriented market timing noise and nuisance – and not what they should be looking at,” Nelson emphasized. “The one thing I can promise people when they come on board with me, is that I have been doing this for almost two decades and can help clients from making the same mistakes that I have made in the past – giving them a leg up.” THE SUIT MAGAZINE p.53
Page 1 and 2: Issue 61 JULY 2014 exclusive interv
Page 3 and 4: publishers note ISSUE 61 | JULY 201
Page 5 and 6: BUSINESS / FINANCE 31 Equity Exposu
Page 7 and 8: THE SUIT MAGAZINE p.7
Page 9 and 10: nia cities reveals still lower mini
Page 11: STILL PUZZLED ... by your supply ch
Page 14 and 15: to finance struggling businesses on
Page 16 and 17: y diane e. alter TRIVIA ISN’T TRI
Page 18 and 19: The 7 Most Common Negotiating Mista
Page 20 and 21: BAD BYOD HABITS THAT CAN EXPOSE YOU
Page 22 and 23: y david stein >>> Lease - Don’t O
Page 24 and 25: y felix badea Talking Face to Face
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Page 30 and 31: y judy magness Building Wealth in S
Page 32 and 33: y judy magness The Complications of
Page 34 and 35: y david stein DANGER On The Way Dow
Page 36 and 37: Brave Investing During a Sell-Off P
Page 38: y judy magness Off Campus Housing P
Page 41 and 42: part of why he attained a certifica
Page 43 and 44: With the utmost of integrity, we ta
Page 46 and 47: MOTIVATED CLIENTS ALWAYS WELCOME En
Page 48 and 49: y amy m. armstrong A DISCIPLINED AP
Page 50 and 51: y judy magness Guiding Investor Ris
Page 54 and 55: Promoting World-Changing Innovation
Page 56 and 57: y amy m. armstrong CANDID CONVERSAT
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Page 64 and 65: y a. marie velthuizen One Uniform S
Page 66 and 67: WHY RENEWABLE ENERGY? Save money. R
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